Despite the ideological hype over revenue increases for the upper-income taxpayers and restricting itemized tax deductions, almost all the considered changes will tackle only a portion of the deficit. As the graph below indicates, the Congressional Budget Office projects a fiscal year 2015 deficit under current policy of $883 billion, not far from the $1 [...]

If income tax deductions are capped or limited—an idea that often comes up in the debate over both the fiscal cliff and long-run tax reform—the biggest losers could well be charities. At a time when the government role in providing a safety net may shrink, many of these groups may become increasingly important.  Yet deduction [...]

President Obama and administration officials have offered two different revenue targets for the fiscal cliff debate: $1 trillion and $1.6 trillion (sometimes reported as $1.5 trillion). You might be wondering (I was) where those numbers come from. The $1 Trillion President Obama wants to extend the majority of the Bush-era individual income tax cuts—enacted in [...]

At his press conference yesterday, President Obama said it is nearly impossible to raise taxes on the wealthy (a key piece of his fiscal strategy) without increasing their tax rates. It is, Obama said, a matter of simple arithmetic.   But a look at some very rough numbers suggests that if the president and congressional [...]

So the dance begins. President Obama, House Speaker John Boehner (R-OH), and various other lawmakers are starting to lay down their markers as they look to back away from the fiscal cliff. Based on their public words, at least, the parties remain far apart. Yet there are signs that both sides are looking for a deal. [...]

The Tax Policy Center is back in the political cauldron, this time in the wake of its new research that looks at the revenue and distributional effects of caps on itemized deductions. TPC’s aim was to analyze an interesting idea that could find its way into future tax reform plans. Its conclusion was a mix of good [...]

On Friday, congressional Democrats released the results of a new analysis of base-broadening, rate-cutting tax reform by the Joint Committee on Taxation. For reformers everywhere the results seemed exceedingly grim: By eliminating all deductions, Congress could reduce tax rates by only a puny 4 percent without adding to the deficit. The top tax rate, for instance, [...]

You’ve probably heard claims that Mitt Romney wants to cut taxes by $5 trillion. Here are five things you should know about that figure: 1. $5 trillion is the gross amount of tax cuts he has proposed, not the net impact of all his intended tax reforms. Governor Romney has been very specific about the [...]

Let’s say you are truly offended that 47 percent of Americans don’t pay income tax. Just complaining won’t fix the problem. All those freeloaders are still out there, dodging their responsibilities as red-blooded taxpaying Americans. So, let’s stop fooling around and do something about it. Here is my modest proposal. Five solutions to make sure everyone pays [...]

Yesterday, Kevin Hassett, an American Enterprise Institute economist and informal adviser to Mitt Romney, insisted that Romney would not raise taxes on low- and middle-income households in order to finance his promised 20 percent across-the-board rate cut. Nor would those rate cuts increase the deficit. Instead, Kevin predicted that if Congress did not trim tax [...]